AUSTIN — As Texas continues to gain new residents — as many as 582,000 in 2019 alone — the traditional real estate cycle of busy summers and slower winters has nearly vanished in some Texas communities.
The Texas real estate cycle historically follows the school calendar where families tend to move in the late spring and early summer in the hopes of having their kids settled by the start of the school year. But as the Texas housing market has become more competitive with increasing population and limited inventory, that mindset appears to have changed, real estate experts said.
“Due to COVID[-19], we've seen a lot of changes where the second, third or fourth quarters of 2020 and then well into the first three quarters of 2021, we really didn't see a cycle slowdown at all. It was really just all on a tremendous upswing for about five quarters,” said Marvin Jolly, chairman of Texas Realtors.
Jolly said he believes there were several factors influencing the shift, including children attending virtual school in the fall of 2020, which made moving less complicated for parents. He also pointed toward the increase in investor purchases, transactions by people who do not have a school schedule to keep in mind.
Low interest rates have also made buying a home more desirable at a time when the market is low on inventory — specifically in new construction, which has been plagued by hiccups in the supply chain and increasing labor and supply costs.
The Texas real estate market has also yet to catch up from the housing market crash.
“When the recession hit in 2009 builders stopped buying land, stopped developing new communities,” Jolly said. “We were still a little bit behind on new construction, and then when all this high mobility and remote working in this boom happened, the builders were caught off guard and they did not have enough inventory at that point.”
Jolly added that when the pandemic hit many thought it would be devastating to Texas' real estate market, but it was just the opposite. Young professionals, emboldened by the idea that they can live anywhere while working from home, and empty nesters, who decided to take early retirement, filled the market.
Homes are now spending 24 fewer days on the market in the third quarter of 2021 compared to last year and 22 fewer days than in 2019, Texas Realtors data shows.
“A lot of those people chose that if they could work from anywhere they wanted to work from Texas,” he said.
The surge in the Texas real estate market has occurred most notably in major metropolitan areas with Austin reporting nearly 200 new residents per day and about 250 in Houston and Dallas each. But the growth can even be seen in smaller communities like Corsicana and Jacksonville, both southeast of Dallas.
“Spring and summer were [busier], but now that's all changed. It’s really just about the same all year,” said Renee Caperton, a broker with Marrs & Associates Realty.
Caperton said in her markets of Corsicana and surrounding counties, the trend of a constant market has been ongoing for the past couple of years but has accelerated in 2021 even as inventory has dwindled.
She added that because competition abundant, families are willing to move whenever a home is ready, instead of waiting for convenient times in the year.
“If a property is priced within market range, … we see houses go under contracts a lot of times the first day, and with multiple offers,” Caperton said. “We have more buyers than we do sellers, so a lot of people are watching for that new stuff to come on the market.”
Mike McEwen, a broker with Cherokee Real Estate in Jacksonville, said 2021 is slated to be his best year yet.
McEwen said the last few houses he sold in the colder months, when the market tends to slow down, have gone for more than asking price, something that has “never happened before” in his community.
“In Jacksonville, in the 32 years I've been in the business, this has been the healthiest real estate year we have really ever had,” he said. “I think in our area, even though it's been very healthy recently, I do suspect that going down the road a little bit, it'll become more stable”
Jim Fite, president and CEO of Century 21 Judge Fite Company, said his company services much of North Texas.
He said in that area, though not as distinct as it was before, the real estate cycle is still a market force in that fewer transactions have occurred in the wintertime than in the summer, mostly because there is less inventory as people chose to list their homes following the holidays.
However, when a house is listed, even in the winter, sellers continue to field multiple offers and the home tends to sell quickly, Fite said. He added that the state continues to have an extremely strong winter market, stronger than its has had in the past five years.
“Even though it's wintertime and you'd think it would slow down, that's not the case if the house is priced right and looks good and smells good,” Fite said.